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Factors to Note Ahead of Ollie's Bargain's (OLLI) Q1 Earnings

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Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) is likely to register an increase in the top line when it reports first-quarter fiscal 2021 numbers on May 27, after the market closes. The Zacks Consensus Estimate for revenues is pegged at $423.9 million, indicating an improvement of 21.4% from the prior-year quarter.

Further, the bottom line of this extreme value retailer of brand name merchandise is expected to improve year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has increased by a penny to 66 cents over the past 30 days. The figure suggests growth from 49 cents reported in the year-ago period.

Notably, the company has a trailing four-quarter earnings surprise of 21.4%, on average. In the last reported quarter, this Harrisburg, PA-based company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 14.1%.

Key Factors to Note

Ollie's Bargain business operating model of “buying cheap and selling cheap”, cost-containment efforts, focus on store productivity and expansion of customer reward program — Ollie's Army are likely to have contributed to the first-quarter performance. We believe that the company’s endeavors might have aided it in capitalizing on growing consumer demand for essentials and other daily purchases amid the ongoing pandemic. Again, higher net sales, gross margin expansion and better expense management are likely to have driven bottom-line growth.

On its fourth-quarter earnings call management stated that it was pleased with the current sales trends and that the company remains on track to post stellar first-quarter performance. It also added that first-quarter fiscal 2021 comparable store sales were tracking up in the high-single digits quarter-to-date through Mar 18. We note that the Zacks Consensus Estimate for comparable store sales for the to-be-reported quarter is currently pegged at 8%.

Apart from the aforementioned factors, we cannot ignore concerns related to deleverage in supply-chain cost, promotional pressure and expenses associated with operating through the ongoing crisis.


What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Ollie's Bargain this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Ollie's Bargain has an Earnings ESP of +19.08%, it carries a Zacks Rank #4 (Sell).

3 Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Best Buy (BBY - Free Report) has an Earnings ESP of +5.10% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Abercrombie & Fitch (ANF - Free Report) has an Earnings ESP of +32.30% and a Zacks Rank #3.

Ulta Beauty (ULTA - Free Report) has an Earnings ESP of +10.22% and a Zacks Rank #3.

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